Hepatic steatosis, defined by triacylglycerol (TAG) accumulation, is a prevalent disorder that is involved in the etiology of numerous metabolic diseases including obesity, diabetes and cardiovascular disease. Despite the importance of TAG metabolism, the mechanisms regulating hepatic TAG hydrolysis and their effects on disease etiology are unknown. The objective of this application is to define the role of adipose triacylglycerol lipase (ATGL) in hepatic energy metabolism and in mediating diet-specific effects on steatosis and insulin resistance. The hypothesis of the proposed studies is that ATGL is a central regulator of liver energy metabolism, steatosis and insulin sensitivity and mediates the response, in part through PPAR-&#945;activation, to different diets that induce hepatic dysfunction. We base this hypothesis on Preliminary Studies from our laboratory showing that ATGL: is the principal hepatic TAG lipase;preferentially metabolizes TAG-FA derived from exogenous uptake compared with those derived from de novo synthesis;channels the released FA to pathways of &#946;-oxidation rather than VLDL synthesis;forms a regulatory loop with peroxisome proliferator activated receptor-&#945;(PPAR-&#945;). The rationale for the proposed research is that identifying the role of ATGL in mediating hepatic TAG metabolism will provide significant insight into the relationship between steatosis and hepatic dysfunction, thereby providing new avenues for nutritional or pharmaceutical therapies against numerous metabolic diseases. The hypothesis will be tested using three specific aims: 1) to determine the effect of liver-specific ATGL gain or loss-of-function on hepatic energy metabolism, steatosis and insulin sensitivity in response to different dietary challenges, 2) to characterize the crosstalk between PPAR-&#945;and ATGL and its importance in regulating hepatic energy metabolism and 3) to define how different TAG-FA sources regulate lipid droplet morphology and protein composition and ATGL-protein interactions. Under the first aim, adenovirus-mediated gain or loss-of-function studies and different dietary challenges will be used to test the effects of ATGL on steatosis, hepatic energy metabolism and insulin sensitivity. The second aim will employ both in vitro and in vivo methodologies to characterize the regulatory crosstalk between ATGL and PPAR-&#945;and the significance of this interaction in hepatic energy metabolism. The final aim will define how different sources of FA (de novo synthesis or exogenous) affect ATGL and lipid droplet biology to influence hepatic metabolism. The proposed research is significant because it will characterize a novel mechanism regulating hepatic energy metabolism, which plays a critical role in the etiology of many metabolic diseases.